The Importance of Planning
What is planning? According to Wikipedia; “Planning in organizations and public policy is both the organizational process of creating and maintaining a plan; and the psychological process of thinking about the activities required to create a desired future on some scale. As such, it is a fundamental property of intelligent behavior.”
So what is an example of “intelligent behavior” in the wine industry? As a group, we are pretty good at production planning. We know roughly what our yield per acre for a certain vineyard will be, we know how many acres are planted, hence we know how many tons of grapes we will have to make wine with. From this we can calculate number of barrels needed, glass, capsules, corks, etc.
Where we tend to have less accuracy is in planning how to sell this splendid wine we made. Wineries that have been in business for awhile, and have steady production have a good idea of how much wine their club will need, what kind of sales they can expect at their tasting room,how much their distributors will take, and so on. Newer or growing wine brands have less historic information to go on.
So what I would like to do here is suggest a methodology for building a sales plan for your wine. First step is obvious, how much wine do I have to sell. Next, look at your predictable outlets. How much did I sell to the trade last year? Is there any reason why that number will change? To get an accurate feel for this, you need to review on a market by market basis, your historical results.
How much wine did I sell direct to trade. How much did I sell through three tier. When looking at three tier, be specific. What did we sell in Ohio? Was the number of cases consistent with the previous year? Is there a reason that number might change this year? Some reasons for a fluctuation might be change in a distributor, your distributor taken on a new, competitive brand, or change in your sales personnel. Maybe the distributor gained or lost a key chain placement, late in the year which will greatly impact this year.
Once you understand what you can reasonably expect from trade sales, you need to look at direct to consumer. (Certainly you could look at direct to consumer first, and trade next) In looking at direct look at your clubs, your tasting room, and your e-comm. What did the last two yearslook like, by channel. Based on the trends, what should it look like this year? Am I gaining club members, or losing? Is my shopping cart business growing? Is tasting room traffic down or up?
If I add my expectations for trade and direct to consumer do I have enough wine, too much, not enough? If not enough, what should I do? Maybe raise prices, maybe pull out of a under performing market, maybe cut back distributor allocations? If I need more sales, what I do? Actually, there are more strategies for growing sales then I could possibly list here, and there has been plenty already written about strategies to grow your business.
Anyway,the point of this blog post is to highlight the importance of a plan. Like my first boss use to tell me, “if you don’t plan where you are going, you will never get there”.